Required Motor Vehicle Insurance in Alberta

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The topics in the Dial-A-Law series provide general information on a wide variety of legal issues in the Province of Alberta. This service is provided by Calgary Legal Guidance funded in part by the Alberta Law Foundation.

This topic will discuss the required motor vehicle insurance you carry in Alberta.

You are required to have insurance on your vehicle to cover the cost of any damage or injury in a motor vehicle collision you cause to property or another person. Insurance is required for any vehicle you may drive on the streets or highways in Alberta. Whenever, you park on a public street even if you no longer drive that vehicle, you should carry a valid insurance on the vehicle.

You cannot purchase license plates for your vehicle until you must show the Motor Vehicles Registry that you have a valid insurance policy on that vehicle. Your insurance policy will apply only to the vehicle named on the policy. If you purchase a new vehicle, you can have your old plates transferred to the new vehicle at Motor Vehicles, but you will require a new insurance policy for the purchased vehicle.

If you transfer the plates from one vehicle to another without telling your insurance company to authorize the transfer, you can be charged for driving without insurance. If you get into an accident, the insurance company will deny the insurance coverage. You cannot use someone else’s license plates on your vehicle, even if the plates were on the vehicle before you purchased it.

You could be fined no less than $2,500 for the first offence of driving without insurance and if you are charged a second time within 1 year, you will receive a mandatory jail sentence of at least 30 days and possibly up to 6 months. Without insurance, you are also personally responsible for the damages to the other person and their property if you are in a motor vehicle accident that is your fault.

The basic terms and conditions of automobile insurance are the same for all policies. The amount of coverage can differ and so can the cost. All insurance policies are divided into 3 sections:

  • Section A covers injury and damage to other people and their property
  • Section B covers medical expenses of anyone including yourself, injured in a motor vehicle accident
  • Section C covers damage to your car.

You are required by law to have Section A and Section B insurance.

Section A is often called PLPD – Public Liability and Property Damage. The lowest limit you can legally carry is $200,000. This means that if you are at fault in a vehicle accident and the person in the other vehicle is injured, your insurance company will pay for the damage to their vehicle and for their injuries up to a maximum of $200,000. If the person in the accident sues you and the Court awards more than $200,000 you could be responsible for the rest. You should increase your limit as damages in any serious accident could easily exceed $200,000.

Section A insurance covers injuries to non-paying passengers in your car if you were negligent while driving. It also covers anyone who you consent to drive your vehicle. For example, if you lend your car to a friend or family member and they have an accident, your insurance will cover damages to the other party. You should let your insurance company know if you allow someone to frequently drive your vehicle. The insurance company may deny coverage if they are not properly advised.

Section B insurance covers injuries to yourself or another person when you are responsible for the accident. If you get into an accident and someone in your vehicle is injured or if you hit a pedestrian with your vehicle this insurance will cover the medical expenses. Medical expenses include ambulance charges, and prescribed medication. It also pays for certain income replacement to accident victims who are totally disabled for up to 2 years. It also provides coverage for death and a portion of the funeral expenses. The insurance will pay a lump sum or payments to the dependent relatives for up to 2 years.

Section C insurance covers the damage to your own vehicle whether you are at fault for the accident, or not. If you have a valuable car, or you still owe money on your car, you might want to buy Section C insurance. Your bank or financial institution may insist that you carry Section C coverage if you still owe a substantial amount of money to them for the vehicle. The law does not require you to carry this type of insurance.

Section C insurance is divided into 4 categories of coverage:

  • Collision coverage is for situations where you are involved in a collision with another vehicle, or a roll-over of your vehicle.
  • Comprehensive coverage will cover everything except for collision.
  • All perils coverage is a combination of collision and comprehensive insurance.
  • Specified Perils is commonly for fire and theft, but includes damage caused by lightening, earthquake, hail, explosion and attempted theft.

Your insurance company may refuse to pay for any damages to your vehicle, if you allow someone to drive your vehicle without a valid driver’s license or with a suspended driver’s license. Also if you were racing your vehicle, or using your vehicle for an unlawful trade, the insurance company may also refuse to cover any damages to your vehicle.

The insurance company must, by law, pay for the damages to other vehicles or for any injuries done to other persons; however, the insurance company can sue you for what monies they pay on your behalf. If you are being sued by an insurance company you should consult with a lawyer.

You must advise the insurance company of any new developments concerning your policy to keep your insurance valid. For example, you must advise your insurance company if you finance the purchase of a vehicle, or if you put the car up as collateral for a loan. You must also inform your insurance company when you get a speeding ticket. If you have not advised your insurance company of these things, and others required by your insurance company, you may be denied coverage.

You are required by law to promptly report any accident to your insurance company in writing. Do not take any responsibility for the accident or settle any claim without the approval of your insurance company if you are expecting to be covered by your insurance company. You are required to cooperate fully with your insurance company in settlement negotiations and in legal proceedings.

In summary, you are required by law to carry automobile insurance on your vehicle. You must report any changes that could affect your policy to your insurance company and follow the conditions of the policy. You must report all accidents to your insurance company. If you are involved in a personal injury accident you should consult a lawyer.